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The Global Fund and Value for Money – Amanda Glassman

In this austere budget climate, generating “value for money” (VFM) is a top concern for global health funding agencies and their donors, who want the biggest bang for their buck in terms of lives saved and diseases controlled. To this end, CGD has convened a working group to help shape the VFM agenda for global health funding agencies, with a particular focus on the Global Fund to Fight AIDS, Tuberculosis and Malaria. Leading these efforts is my guest this week, Amanda Glassman, a senior fellow and director of the global health policy program at the Center for Global Development.

We start with a discussion of the magnitude of global health funding (some $30 billion per year or about one-out-of-four aid dollars) and by getting to know the Global Fund - a multilateral agency that emerged from the G8 meeting process in 2002 when times were better and global health was seen as an area where money could make a difference.

“The Global Fund came out of an effort both to expand aid to developing countries and to reform aid,” Amanda tells me. “It was also a response to mounting pressure for action on a specific epidemic, HIV/AIDS.”

Contributions rose rapidly, with the lion’s share coming from the United States, followed by France, Germany, the UK and Japan. By 2008, the Global Fund was raising about $3 billion a year, or about 10% of global health aid (for more on the fascinating history of the Global Fund, see this CGD background paper).

In 2011, however, the Associated Press reported on what “massive corruption” at the Global Fund. This prompted a firestorm of criticism, much closer scrutiny of the Global Fund’s work, and a drop in funding, with several donors withholding their contributions.

Amanda and I discuss how Bill Savedoff pointed out that the amount of fraud uncovered was not so massive after all – only about 0.3 percent of total disbursements. However, because the Global Fund—like most other development agencies—does not conduct random audits, there was no way to know if the problems were an anomaly or the tip of the iceberg.

They were, however, a major distraction.

"It really is nothing, it's budget dust,” says Amanda. “Still, you don't want any misuse and fraud in programs obviously, and I think it's a sign of the health of the organization that they were able to detect and report on [it]. But the size of that loss is minuscule and they've been paid it back… The system worked.”

The real problems at the Global Fund and other big health funders, Amanda tells me, are much more fundamental than the occasional corruption scandal.

For example, she says, although the Global Fund was a pioneer in performance-based funding (PBF), grants are generally judged on outputs (e.g. number of bednets purchased and distributed) rather than coverage or outcome indicators (e.g. proportion of children under age 5 sleeping under a bednet, or reductions in the number of cases of malaria).

“When you track how much money people have spent or how many things you've bought, that doesn't always align with the goal of reducing disease as much as possible," says Amanda.

Moreover, she says, the indicators are self-reported, making them vulnerable to manipulation.

“If the incentive is to achieve certain targets and they're administrative-type targets and I'm not going to check it independently or I'm just going to make sure the paperwork matches, you see this tendency to meet all your goals,” she says.

On top of that, the so-called allocation mix – how much funding goes to which interventions– is determined by country coordinating mechanisms (CCMs), a sort of club made up of country-level stakeholders.

So, for example, if people who are concerned about HIV/AIDS are better organized and more vocal than people concerned about malaria or TB, funding will flow to HIV, even if allocating funding to fighting malaria would have been more cost-effective in terms of lives saved.

"The CCMs have been kind of a horse-trading arena instead of an arena for technical deliberation in order to come up with the best mix of evidence-based interventions that would maximally affect the incidence of these three diseases," says Amanda.

Worse, "we don't even know for sure what interventions are being financed in some of those grants, because that's not how the records are being kept,” she says. “There's a lot of different progress indicators that countries are reporting on, there's no standardization.”

In November, the Global Fund board will select a new executive director who will have to face head-on these challenges that threaten the Fund’s vision, impact on disease and fundraising potential. There is a short list of candidates, Amanda tells me, but the names have not been released.

Amanda offers some observations about one direction in which the leadership selection process might proceed. You can hear that towards the end of the Wonkcast.

My thanks to Alexandra Gordon for her production assistance on the Wonkcast recording and Jenny Ottenhoff for drafting this blog post.